EUR/USD Forex Signal: Short-Term Bullish Retracement from $1.0900 Area

The long-term bearish trend remains likely to resume.

My EUR/USD signal on 23rd March was not triggered, as there was no bullish price action when the support level I had identified at $1.0956.

Today’s EUR/USD Signals

Risk 0.75%.

Trades must be taken between 8am and 5pm London time today only.

Short Trade Idea

  • Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.0937, $1.0956, $1.0985, or $1.1025.
  • Put the stop loss 1 pip above the local swing high.
  • Adjust the stop loss to break even once the trade is 20 pips in profit.
  • Remove 50% of the position as profit when the price reaches 50 pips in profit and leave the remainder of the position to ride.

Long Trade Idea

  • Long entry immediately upon the next touch of $1.0710.
  • Put the stop loss 1 pip below the local swing low.
  • Adjust the stop loss to break even once the trade is 20 pips in profit.
  • Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.

The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.

EUR/USD Analysis

I wrote on the 23rd of March that we were seeing a weakly bullish short-term consolidation above the support level at $1.1012, but it was far from clear what direction the price would take over the day. I thought that a long scalp trade between $1.1000 and $1.1012 might be a good opportunity, but this did not set up.

Over the past couple of weeks, we have continued to see typically deep bullish retracements within a long-term bearish trend which eventually keep reasserting itself. If the price can make a daily (New York) close below $1.0854, it will be making a new bearish breakdown to multi-month lows which would be a bearish sign.

Over the shorter term, we see a bullish rounding near $1.0900 which is pushing the price back up towards the nearby resistance levels, of which there are several, in a bullish retracement. The question is how far this retracement will run.

I think the best approach here today will be to look for a new short trade entry from a convincing reversal on the hourly time frame off any of the nearby resistance levels identified above. I do not want to take any long trades today, although today could be an up day.

EUR/USD

There is nothing of high importance due today regarding either the EUR or the USD.

Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Learn more from Adam in his free lessons at FX Academy

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